The Psychological Contract: The Changing Nature of Employee-Employer Expectations

What is the definition and origin of the psychological contract

The psychological contract describes a phenomenon that occurs largely in the minds of employers and employees . The term governs all the ideas and expectations that workers have about their jobs and includes beliefs about their roles and responsibilities as employees (Starnes , 2007 . It also extends to include employees ' ideas about the rewards that are due to them upon the proper performance of their jobs (Morrison Robinson 1997 . The psychological contract is said to create attitudes and emotions which form and govern behaviour

(Armstrong , 2004 ,

. 46 , and this stems from the fact that a certain level of understanding and trust becomes a part of the agreement between employee and employer , once such a relationship is formed . Despite the implicit nature of the psychological contract , it is a dynamic and seemingly living entity , as the fulfillment (or non-fulfillment ) of expectations on both sides continually refine the understanding that each party has about the contract (Armstrong , 2004 Rousseau , 1995 . This occurs as the conditions under which employees work change over time , and employees are compelled to reassess the expectations that they hold

The psychological contract originated with certain questions that are found to be present in the minds of virtually all employees . These questions involve the concerns that employees have with the profitability of their giving up such large portions of their time and talents for the benefit of an organization . They ask the particularly human question of , What and how am I expected to contribute to this company ' and they are subsequently prompted also to ask , What can I hope to receive in return ' In other words , What 's in it for me Whenever such questions are answered in the mind of the employee (and employer , what results is a psychological contract (Armstrong , 2004

In many ways too the psychological contract finds its origins in the same place that many human rights documents find their provenance Fairness and justice are at the root of many psychological contracts , as employees often expect to be fairly treated and compensated for the work they perform within a given company (Armstrong , 2004 . Employers , too are often aware that the compensation they offer is expected to match the efforts made by the workers in their employ . Yet , the need for fairness exists on both levels , as employees are also expected to do the best job they can , and to demonstrate their ability to adequately handle the situations required by the position that they hold within the company

Also involved with the origins of the psychological contract is the necessity of an employee 's work to help meet one of the basic needs of humans : that of self actualization . Akin to this is the idea of self development , and employees often expect their jobs not only to be equal to their abilities , but to provide opportunities for self development through the existence of challenging projects (Armstrong , 2004 . Within this framework , employees expect that their superiors (or employers...